Profitability Ratio

Year Sales(In Cr) PAT(In Cr) EBIT(In Cr) ROA ROCE ROE EBIT Margin
2017 4003 212 501 5% 14% 12% 13%
2018 5105 296 643 6% 15% 15% 13%
2019 7129 467 1001 7% 16% 14% 14%
2020 6450 423 710 7% 12% 12% 11%
2021 8823 746 1191 11% 18% 18% 13%

Profitability Ratio

18% 18%
16%
15% 15%
14% 14% 14% 13%
12% 12% 13%13%
12%
11% 11%

8%
7%
6% 7% 7% 7%
5% 5% 6%

ROA ROCE ROE EBIT Margin PAT Margin

Row 13 Row 14 Row 15 Row 16 Row 17

Profitablity Ratio
1.Sales doubled in 5 years with CAGR of ~20%.
2.PAT for the company has increased by more than 3 folds in 5 years at a CAGR of ~ 25% , this shows how
high leverage is good for growing company as it helps to reduce cost per unit for growing firms and thus
leads to higher growth in bottomline compared to the growth in top line of a company.
3.ROA ,ROCE & ROE have increased by good margin in last 5 year which tells that firm is using its Asset
efficintly to generate sales & increasing ROCE, ROE suggest that firm is utilizing its borrowed funds
effectively & efficiently to generate higher returns for lenders as well as for shareholders.
4.Although in 2020 sales & profit dropped significantly due to shutdown across the world but company
picked the pace as situation got normal & thus we can see that in year 2021 its sales saw a yoy growth of
40%.
5.Margins have improved significantly and major reason for this is that its sales are gorwing at faster rate
and due to this its fixed cost per unit is reducing which is leading to its improved margin over the years.
high leverage is good for growing company as it helps to reduce cost per unit for growing firms and thus
leads to higher growth in bottomline compared to the growth in top line of a company.
3.ROA ,ROCE & ROE have increased by good margin in last 5 year which tells that firm is using its Asset
efficintly to generate sales & increasing ROCE, ROE suggest that firm is utilizing its borrowed funds
effectively & efficiently to generate higher returns for lenders as well as for shareholders.
4.Although in 2020 sales & profit dropped significantly due to shutdown across the world but company
picked the pace as situation got normal & thus we can see that in year 2021 its sales saw a yoy growth of
40%.
5.Margins have improved significantly and major reason for this is that its sales are gorwing at faster rate
and due to this its fixed cost per unit is reducing which is leading to its improved margin over the years.
 Solvency Ratio
PAT Margin Interest-Coverage Debt-to-Asset Debt-to-Equity
5% 1.78 0.47 1.09
6% 3.03 0.48 1.15
7% 3.24 0.44 0.85
7% 2.53 0.39 0.71
8% 6.47 0.37 0.61

Solvency Ratio
6.47

3%

3.24
3.03
8% 2.53
7% 7% 1.78
5% 6%
1.09 1.15
0.85 0.71
0.47 0.48 0.44 0.61
0.39 0.37
PAT Margin 1 2 3 4 5

Interest-Coverage Debt-to-Asset Debt-to-Equity

Solvency Ratio
1. Interest coverage has been increasing over the years and now it stands at
of ~ 25% , this shows how 6.47 ,which says that firm operating profit is 6.47 times of its interest expense.
r growing firms and thus 2. Such a good interest coverage ratio provide cushion towards paying off the liability
ompany. in timely manner without any defaults.
at firm is using its Asset 3.D/A have reduced significantly in past 5 years & is below 1 which suggest that in case
its borrowed funds of extreme circumstances company has enough asset to pay off its all long term
reholders. liabilities.
the world but company 4.D/E have also reduced significantly, which suggest that company has paid off certain
sales saw a yoy growth of part of debt in past 5 years, now its capital structure consist of 40% debt & 60% equity.
5.Thus, from trend analysis of above solvency ratios we can say that company is above
are gorwing at faster rate par with respect to its solvency position as improving solvency ratios over the year
d margin over the years. suggest that company is highly solvent to pay off its existing long term obligation also
 r growing firms and thus 2. Such a good interest coverage ratio provide cushion towards paying off the liability
ompany. in timely manner without any defaults.
at firm is using its Asset 3.D/A have reduced significantly in past 5 years & is below 1 which suggest that in case
its borrowed funds of extreme circumstances company has enough asset to pay off its all long term
reholders. liabilities.
the world but company 4.D/E have also reduced significantly, which suggest that company has paid off certain
sales saw a yoy growth of part of debt in past 5 years, now its capital structure consist of 40% debt & 60% equity.
5.Thus, from trend analysis of above solvency ratios we can say that company is above
are gorwing at faster rate par with respect to its solvency position as improving solvency ratios over the year
d margin over the years. suggest that company is highly solvent to pay off its existing long term obligation also
with such a good solvency position it provides cushion for varun beverages to borrow
money in future at lower interest rate for expansion or penetration purposes.
 Liquidity Ratio Activity R
Current Ratio Quick Ratio Asset Turnover
0.61 0.33 0.97
0.66 0.32 1.08
0.75 0.36 1.09
0.74 0.33 1.00
0.84 0.36 1.30

Liquidity Ratio Activ

6.47 0.84
0.75 0.74 39.88
0.66
0.61

26.65

0.36 0.36
0.33 0.32 0.33

9.12 8.83 8
0.61 6.19 7.08
0.37
5 1 2 3 4 5 0.97 1 1.08 2 1.09

ty Current Ratio Quick Ratio Asset Turnover Inventory Turnover

Liquidity Ratio
stands at 1. Current ratio has been improving over the Activity Ratio
est expense. years & quick ratio has been some what stable. 1.Inventory turnover ratio has significantly r
ying off the liability 2. Although it is below 1 but it does not speak expansion strategy which has lead to higher
much about its liquidity positon. As low 2.Its payable turnover ratio has dropped ove
suggest that in case liquidity ratio is due to high short term loan & receivable turnover ratio which means that
all long term having a high short term obligation in this type cash faster and it is paying its supplier at slo
of business is common as inventory gets sold payable turnover is due to favourable credit
has paid off certain faster and to continue with the production a company in terms of its liquidity position an
% debt & 60% equity. short term loan is the only option face a liquidity crunch amid such a favourab
t company is above 3.We can judge its liquidity position from its debtors.
os over the year cash flow statement which suggests that it net
erm obligation also cash has grown by more than double at a
 years & quick ratio has been some what stable.
ying off the liability 2. Although it is below 1 but it does not speak expansion strategy which has lead to higher
much about its liquidity positon. As low 2.Its payable turnover ratio has dropped ove
suggest that in case liquidity ratio is due to high short term loan & receivable turnover ratio which means that
all long term having a high short term obligation in this type cash faster and it is paying its supplier at slo
of business is common as inventory gets sold payable turnover is due to favourable credit
has paid off certain faster and to continue with the production a company in terms of its liquidity position an
% debt & 60% equity. short term loan is the only option face a liquidity crunch amid such a favourab
t company is above 3.We can judge its liquidity position from its debtors.
os over the year cash flow statement which suggests that it net
erm obligation also cash has grown by more than double at a
everages to borrow CAGR of more than ~20% in last 5 years.
n purposes.
 Activity Ratio
Inventory Turnover Payable Turnover Receivable Turnover
9.12 6.19 26.65
8.83 7.08 39.88
8.09 6.74 41.33
6.94 5.41 26.69
3.09 5.68 39.89

Activity Ratio

41.33
39.88 39.89

26.65 26.69

9.12 8.83 8.09 6.74

6.19 7.08 6.94
5.41 5.68
3.09
1.08 1.09 1.00 1.30
1 2 3 4 5

Asset Turnover Inventory Turnover Payable Turnover Receivable Turnover

vity Ratio
ventory turnover ratio has significantly reduced in past 5 year this is due to its agressive
nsion strategy which has lead to higher inventory level.
payable turnover ratio has dropped over the years and it is significantly lower than
ivable turnover ratio which means that company is able to convert its credit sales into
faster and it is paying its supplier at slower rate, seeing its fundamental positon, lower
ble turnover is due to favourable credit terms and this suggest a strong position of
pany in terms of its liquidity position and its very unlikely that varun beverages could
a liquidity crunch amid such a favourable terms it has with its suppliers as well as
ors.
 nsion strategy which has lead to higher inventory level.
payable turnover ratio has dropped over the years and it is significantly lower than
ivable turnover ratio which means that company is able to convert its credit sales into
faster and it is paying its supplier at slower rate, seeing its fundamental positon, lower
ble turnover is due to favourable credit terms and this suggest a strong position of
pany in terms of its liquidity position and its very unlikely that varun beverages could
a liquidity crunch amid such a favourable terms it has with its suppliers as well as
ors.